Gold News

Gold Trading "Flat, Cautious" After Surge as "Choppy Action" Forecast, Indian Premiums Ease on Supply

GOLD TRADING in Asia and London was quiet Wednesday morning, with prices holding $10 per ounce below yesterday's sudden rise to 3-week highs above $1267.
 
Silver also slipped but held onto more of Tuesday's 3.2% gain to $20.45 per ounce.
 
Asian stock markets fell more than 1% meantime, but European shares ticked higher with commodities as major government bonds held flat.
 
After " gold prices soared on Tuesday," said one brokers' note overnight, "we [saw] gold trading relatively flat."
 
"We suspect that given the better-looking chart patterns," says INTL FCStone, noting yesterday's 2% surge, "the current rally in gold will likely continue until $1290."
 
Gold trading volume in US Comex futures yesterday doubled from the 7-week low hit Monday, one of the 5 lowest daily turnovers of 2013 according to Reuters' data.
 
But rising only to 154,000 contracts, Comex gold futures trading still lagged the recent 30-day average of 182,000.
 
Junior gold mining stocks meantime had their best trading day since late October, with those making up the Market Vectors Junior Gold Miners ETF (GDXJ) rising more than 4%.
 
That only took the junior miner stocks to 1-week highs however, some 61% down from the start of the year.
 
"Looking forward," says ANZ Bank in Australia, "prices may find it hard to maintain yesterday’s momentum with Asian demand likely to taper off tomorrow."
 
"[Gold] trading is bound to be increasingly cautious," agrees a note from Swiss bank and London market-maker UBS, "with investors becoming more and more defensive" ahead of the Christmas shutdown.
 
"Given diminishing liquidity conditions heading into year-end, choppy price action should remain a feature for the remainder of 2013."
 
The volume of gold trading on China's officially-approved Shanghai exchange rose today from Tuesday, but lagged Monday's two-week high by value.
 
Although prices rose, Shanghai's gold premium to London quotes fell further, edging below $6 per ounce as the Yuan rose to fresh record highs against the US Dollar.
 
Gold premiums in India today fell back to $120 per ounce according to local dealers, after there was "some delivery" from the Multi Commodity Exchange, the country's gold trading venue for futures contracts.
 
"That has put pressure on premiums," Reuters quotes Bachhraj Bamalwa of the All India Gems & Jewellery Trade Federation.
 
India's imports of gold and silver bullion sank over 80% by value last month compared to November 2012, new data showed today, dropping to barely $1.0 billion as the government's anti-gold import rules continued to bite.

Adrian Ash is director of research at BullionVault, the physical gold and silver market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and is now a regular contributor to many leading analysis sites including Forbes and a regular guest on BBC national and international radio and television news. Adrian's views on the gold market have been sought by the Financial Times and Economist magazine in London; CNBC, Bloomberg and TheStreet.com in New York; Germany's Der Stern; Italy's Il Sole 24 Ore, and many other respected finance publications.

See the full archive of Adrian Ash articles on GoldNews.

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